Ralph Lauren Agrees to Pay $1.6 Million in U.S. Bribe Cases

April 22 (Bloomberg) -- Ralph Lauren Corp., the retailer of
its namesake brand clothing, will pay about $1.6 million to
resolve U.S. regulatory and criminal claims that a subsidiary
paid bribes to officials in Argentina from 2005 to 2009.

The apparel company reported violations of the Foreign
Corrupt Practices Act to regulators after discovering it in a
2010 internal review, the Securities and Exchange Commission
said today in a statement. New York-based Ralph Lauren signed a
non-prosecution agreement to settle the cases.

Ralph Lauren agreed to pay $593,000 in disgorgement and
$141,845.79 in prejudgment interest, the SEC said. The company
will pay an $882,000 penalty in parallel criminal proceedings by
the U.S. Justice Department, the SEC said.

“When they found a problem, Ralph Lauren Corporation did
the right thing by immediately reporting it to the SEC and
providing exceptional assistance in our investigation,” George
Canellos, the SEC’s acting enforcement director, said in the
statement. The settlement “makes clear that we will confer
substantial and tangible benefits on companies that respond
appropriately to violations and cooperate fully,” he said.

Ralph Lauren’s subsidiary RLC Argentina used a so-called
customs broker to funnel about about $568,000 in bribes to
ensure the clearance of prohibited goods, avoid inspections and
to import certain items without the necessary paperwork, the SEC
said.

Phony Claims

To disguise the illegal payments, the customs broker
submitted invoices to RLC Argentina with phony claims for
“Loading and Delivery Expenses” and “Stamp Tax/Label Tax,”
according to the agreement. In addition to the bribes, RLC
Argentina’s general manager directly provided or authorized
improper gifts to government officials including perfume,
dresses and handbags valued valued from $400 to $14,000 each.

Under the criminal accord, the Justice Department won’t
bring charges as long as Ralph Lauren cooperates with an ongoing
investigation, implements certain compliance measures and makes
periodic reports.

The company discovered the violations after disseminating a
new FCPA compliance policy in February 2010, the SEC said. Later
that year, RLC Argentina employees reviewed the policy and
raised concerns about the customs broker’s work. Within two
weeks of uncovering the payments and gifts, RLC reported its
preliminary findings to both the SEC and Justice Department.

“Ralph Lauren did all the right things in this situation:
we investigated, reported, cooperated with authorities,
conducted a worldwide assessment and implemented a series of
remedial measures,” Tom Hanusik, the company’s attorney at
Crowell & Moring LLP, said in an interview. “The unprecedented
use of non-prosecution agreements by both agencies reflects
that.”